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Price v. American International Group, Inc. (Negligence & Safe Place Statute)

Posted on by Hamilton

In Price v. American International Group, Inc. (2019AP57), the Court of Appeals District I held that WE Energies was not liable for an injury to an employee of an independent contractor.

WE Energies contracted with International Chimney Corporation (ICC) for the demolition of a chimney at WE Energies’s power plant. Ironworker and ICC employee Price was injured working on the demolition. Price sued WE Energies, alleging negligence and safe place statute claims.

Wisconsin courts have generally held that entities hiring independent contractors are not liable for injuries sustained by the independent contractor’s employees, unless “the hiring entity commits an affirmative act of negligence or where the entity has a nondelegable duty because the independent contractor is engaged in extrahazardous work.”

The court disagreed with Price that these exceptions applied and held that WE Energies was not liable for Price’s injuries. WE Energies did not commit an affirmative act of negligence leading to Price’s injury when it allegedly pressured ICC to perform the work quickly. The court found no evidence that WE Energies negligently forced ICC to prioritize speed over safety or utilize certain riskier methods to complete the work faster. ICC as an independent contractor had the sole responsibility to decide how to perform the work.

The court further found that the work for which WE Energies hired ICC was not extrahazardous. Previous case law has held that general demolition work is dangerous but not extrahazardous because special safety precautions can mitigate the danger. The court found the work in this case did not qualify as abnormally dangerous, so this exception to nonliability did not apply.

Finally, the court dismissed Price’s safe place statute (Wis. Stat. § 101.11(1)) claims. Price did not sufficiently argue that an unsafe condition associated with the structure of the building contributed to his injury.

For these reasons, the court found WE Energies was not liable for plaintiff Price’s injuries.

Wisconsin Supreme Court Declares Safer at Home Order Unenforceable

Posted on by Hamilton

The Wisconsin Supreme Court has issued a 4-3 decision in Legislature v. Palm, declaring the Department of Health Services’s (DHS) “Safer at Home” order unenforceable and immediately striking down the order. The court held that the Safer at Home order is a “rule” that was required to go through statutory rulemaking processes and that the order exceeds DHS’s authority under Wisconsin’s pandemic statutes.

Though the statewide order has been struck down, Dane County and Milwaukee have already announced they will continue to enforce shelter-in-place guidelines. This trend might continue with other cities or counties if they have their own health departments.

According to WisPolitics and the Wheeler Report, Gov. Evers told reporters on Wednesday evening that the administration will soon be releasing framework for an emergency rule to address the pandemic within the parameters of the court decision.

Chief Justice Roggensack, Justice R. Bradley, Justice Kelly, and Justice Ziegler joined in the majority opinion. Several justices also wrote concurrences expanding on the court’s reasoning. Justice Hagedorn, Justice Dallet, and Justice Walsh Bradley dissented.

 

Decision

After Gov. Evers and DHS-designee Andrea Palm extended Wisconsin’s Safer at Home Order to May 26 under Emergency Order #28, the Republican-led Legislature filed this lawsuit challenging DHS’s authority to issue such an order.

In its ruling on May 13, the Supreme Court agreed with the Legislature that:

  1. The emergency order is a “rule” under Wisconsin’s administrative procedure law and should have gone through the statutory emergency rulemaking process, which allows for legislative oversight and public input.

Wis. Stat. § 227.01(13), defines a rule, in part, as a “general order of general application.” The court concluded that the Safer at Home order was a “general order of general application” because it regulates a class of all Wisconsinites and anyone else who enters the state. Therefore, because of its broad application, the order becomes a rule that must go through rulemaking requirements, including legislative oversight, in Ch. 227.

The court also held that DHS cannot create and enforce criminal penalties for violation of an order.

Addressing the unusual circumstances of the current pandemic, the court acknowledged that the governor has special emergency powers under § 323.10 to implement emergency measures. The 60 day emergency period declared by the governor would give DHS enough time to promulgate rules to address an emergency if necessary. In this case, Gov. Evers’s emergency declaration expired in mid-May, and DHS illegally sought to extend the Safer at Home measures beyond that date without rulemaking.

 

  1. Even if the order does not violate Wisconsin rulemaking laws, the order exceeds DHS’s authority under Wis. Stat. § 252.02.

 The court found that authorities granted by statutes to address epidemics in Ch. 252 do not support the Safer at Home ban on all nonessential and the closure of all nonessential businesses. 2011 Act 21 prohibited state agencies from implementing standards that were not explicitly permitted by statute. The court found that in the Safer at Home order DHS went beyond the parameters for addressing epidemics that the legislature laid out in Ch. 252. While DHS can close things like schools and churches under Ch. 252, DHS does not have the authority to act as broadly as closing all businesses and banning travel. (The court notes that it is not invalidating the provision of the order that closes schools.)

 

The court declined to take up the Legislature’s argument that DHS acted arbitrarily and capriciously by failing to provide a reasoned basis for distinguishing between essential and nonessential businesses.

The Legislature had asked the Wisconsin Supreme Court for a temporary injunction of the Safer at Home order but with several days of lead time for DHS to promulgate an emergency rule to lawfully enforce the order. However, the court decided to enjoin the emergency order immediately, as DHS and the Legislature have had more than two weeks since the lawsuit was filed to begin working on an administrative rule.

 

Concurring Opinions

In a concurring opinion, Chief Justice Roggensack would have stayed the invalidation of the order to May 20 to give the Legislature and administration time to come to an agreement on a valid way to address the pandemic.

In a second concurring opinion, Justice R. Bradley (joined by Justice Kelly) said the DHS Safer at Home order violated constitutional separation of powers because it allowed Secretary Palm to both make the law and execute it. Bradley opined that it is a crucial role of the judiciary to uphold the constitution especially in times of emergency like a pandemic.

In a third concurring opinion, Justice Kelly (joined by Justice R. Bradley) invoked the nondelegation doctrine, which holds that one branch of government cannot delegate its core authority to another branch. In this case, Kelly argued that DHS’s reading of its authority under § 252.02 encroaches on legislative powers. The legislature cannot confer authority to the executive for such far-reaching actions as limiting private gatherings, closing businesses, and banning travel under the vague language in the statutes.

 

Dissents

In a dissent, Justice Walsh Bradley (joined by Justice Dallet) expressed concern at the confusion created by Chief Justice Roggensack’s writing the majority opinion immediately invalidating the Safer at Home order but also writing separately that she would have stayed the enforcement of the decision. Walsh Bradley would have stayed the decision, given the public health consequences of leaving no regulations related to COVID-19 in place.

In a second dissent, Justice Dallet (joined by Justice Walsh Bradley) would have upheld the Safer at Home order because the plain language of Ch. 252 grants DHS broad authority to control communicable diseases. The dissent argues the order is not a rule subject to Ch. 227 because it applies only to immediate circumstances for a limited amount of time. The Dallet dissent further argued that the Legislature did not have standing to bring claims that DHS exceeded its authority under Ch. 252.

In a third dissent, Justice Brian Hagedorn (joined by Justices Walsh Bradley and Dallet) veered from his conservative colleagues on the bench and would have upheld the Safer at Home order. The dissent argued that the Safer at Home order was not a rule because it applied only to a specific factual circumstance and was not of “general application.” A statewide order like Safer at Home would have to have prospective application to different circumstances to be deemed a rule. Here, the Safer at Home order was a ”general order” because it applied to the whole state but was not of “general application” because it addressed only COVID-19 and applied for a limited time (until May 26).

Similar to the Dallet dissent, Hagedorn also argued the Legislature did not have standing to bring claims that DHS exceeded its authority under Ch. 252. The Legislature itself was not injured by and therefore cannot challenge executive enforcement of that statute.

Hagedorn also took issue with the court’s writings on the nondelegation doctrine in this context and on the unenforceability of criminal penalties in DHS orders.

Tiffany Wins 7th CD Special Election

Posted on by Hamilton

Wisconsin state Sen. Tom Tiffany (R-Minocqua) won the May 12 special election in Wisconsin’s 7th Congressional District. Tiffany beat Democrat Tricia Zunker, president of the Wausau School Board, 57.2 to 42.8 percent. Tiffany was an instrumental author in the 2018 Wisconsin tort reform bill (Act 235) supported by WCJC.

With the special election out of the way, Tiffany is now set to run for re-election to the seat in November 2020.

President Donald Trump won the heavily Republican 7th CD by 20 points in 2016. In 2018, incumbent Gov. Scott Walker won the district by more than 16 points, despite losing statewide to now Gov. Tony Evers.

Tiffany replaces former U.S. Rep. Sean Duffy seat (R-Weston), who resigned from the seat in September 2019. Duffy had held the seat since 2011.

Tiffany was elected to the Wisconsin Assembly in 2010 and has served in the state Senate since 2012. Rep. Mary Felzkowski (R-Tomahawk) has announced a run to replace Tiffany in state Senate District 12.

 

 

AG Kaul Asks Congress to Strengthen Paycheck Protection Program, Other Multistate Actions

Posted on by Hamilton

Wisconsin Attorney General Josh Kaul on May 6 joined a group of 24 state attorneys general asking the federal government to strengthen the Paycheck Protection Program (PPP). The AGs sent a letter to Congressional leadership highlighting concerns about implementation of the program, which provides loans to small businesses struggling due to COVID-19.

Concerns from Kaul and the AG coalition include PPP loans made to large, publicly traded companies and lack of transparency. To address these concerns, the AGs suggest Congress adopt several measures before allocating additional PPP funding, such as:

  • Providing stronger, explicit guidance to lenders and eligible businesses.
  • Prohibiting lenders from giving preference to certain customers.
  • Allocating a portion of future funding to minority owned small businesses.
  • Providing more flexibility and technical support to businesses.

Also this month, AG Kaul joined a bipartisan coalition urging USTelecom to further develop robocall traceback and other tools to help law enforcement address illegal robocalls; a coalition urging Congress to reauthorize the Violence Against Women Act (S. 2843/H.R. 1585); and a coalition expressing concern about President Trump’s executive order to keep meat and poultry processing plants open.

Leitner v. LIRC (Unemployment Benefits)

Posted on by Hamilton

In Leitner v. LIRC (2019AP1196), the Court of Appeals District IV held that the plaintiff was ineligible for immediate unemployment benefits after voluntarily terminating her employment.

Plaintiff Rebecca Leitner was working at the University of Wisconsin Medical Foundation from 8:15 a.m. to 5:15 p.m. In June 2017, the Medical Foundation changed her schedule to 8:00 a.m. to 5:00 p.m., making it difficult for her to transport her child to school. In July 2017, Leitner was approved for leave for four hours a day to care for a sick family member. In September 2017, Leitner voluntarily terminated her employment at the Medical foundation, citing the schedule change and need of more time to care for her sick family member.

Despite voluntarily terminating her employment, Leitner argued she was entitled to immediate unemployment benefits because she met two exemptions under Wisconsin’s unemployment benefits statutes (Wis. Stat. § 108.04(7)):

  1. There was good cause attributable to her employer because the change in her schedule made it difficult for her to transport her child to school and fundamentally altered the terms of her employment.
  2. She terminated her employment to care for a family member.

The court found that Leitner was not eligible for immediate benefits because:

  1. The change in schedule made it difficult, but not impossible, for her to transport her child to school. Furthermore, the original 8:15 a.m. to 5:15 p.m. schedule had not been a specified condition of her employment at the Medical Foundation.
  2. According to a physician’s report, Leitner did not need more than the four hours the Medical Foundation allotted her to care for her sick family member.

Dominion Voting Systems, Inc. v. Wisconsin Elections Commission (Voting Software Confidentiality)

Posted on by Hamilton

In Dominion Voting Systems, Inc. v. Wisconsin Elections Commission (2019AP272), the Court of Appeals District IV held that parties reviewing voting software during a recount may disclose opinions based on review of the software.

Wis. Stat. § 5.905(4) provides that if there is a recount in a state election, a party may review software components used to record votes in the election. The statute requires the Wisconsin Election Commission to grant access to software components if the party enters into a confidentiality agreement.

In 2016, the Jill Stein Campaign requested review of the Election Systems & Software, LLC’s electronic voting system used in the November 2016 election. Allowing the campaign to review the system pursuant to § 5.905(4), the Commission provided a confidentiality and nondisclosure agreement that required the campaign to maintain the confidentiality of “all proprietary information.” The Commission did not specifically prohibit the campaign from publicly disclosing any opinions based on review of the Election Systems software.

In this case, Election Systems argued the Commission’s confidentiality agreement was not broad enough to satisfy the confidentiality requirement of § 5.905(4). According to Election Systems, the Commission should have prohibited the campaign from disclosing any comments or opinions derived from the campaign’s review of the voting software.

The appeals court disagreed with Elections System, finding that the plain language of § 5.905(4) does not prohibit reviewing parties from disclosing opinions based on review of voting software. Instead, the statute simply requires maintaining confidentiality of “proprietary information” (i.e., the actual software components). The Commission was not required to expand on the statutory language in its confidentiality agreement with the campaign to prohibit disclosure of opinions based on review of those software components. Furthermore, the court found that the campaign’s disclosure of opinions on the software components was not an unauthorized use of Election Systems’s trade secrets.

AG Kaul Withdraws Act 21 Opinion on High Capacity Wells

Posted on by Hamilton

On May 1, Wisconsin Attorney General Josh Kaul sent a letter to the state Department of Natural Resources (DNR) stating he has withdrawn an opinion from his predecessor interpreting 2011 Act 21’s effects on DNR permitting.

In 2016, former Attorney General Brad Schimel issued an opinion concluding that DNR lacks regulatory authority to require cumulative environmental impact analyses and/or monitoring wells as conditions to granting high capacity well permits under Wis. Stat. § 281.34. The Schimel opinion rests on 2011 WI Act 21, which prevents agencies from promulgating policies with the force of law without explicit legislative authority.

Per the Schimel opinion, DNR began issuing high capacity well permits without considering cumulative environmental impact. Environmental advocacy group Clean Wisconsin then challenged those permit approvals in court, arguing that a 2011 state Supreme Court decision, Lake Beulah Management District v. DNR, said DNR has the authority to preserve waters of the state under the constitutional and statutory public trust doctrines. The Clean Wisconsin case is now before the Wisconsin Supreme Court, which accepted the case last year.

In his letter to DNR Secretary Preston Cole this month, AG Kaul withdrew the Schimel opinion on which DNR was relying for the high capacity well permit approvals. The Kaul letter cites the circuit court decision in Clean Wisconsin – that court found the Schimel opinion was incorrect and contradictory to Lake Beulah.

However, it is unclear if the Schimel opinion is officially “incorrect,” as the circuit court decision has been appealed. The Supreme Court in Clean Wisconsin now has the opportunity to clarify whether Lake Beulah actually addressed the newly enacted 2011 Act 21. The Clean Wisconsin case is currently on hold at the Supreme Court.

U.S. Chamber Institute for Legal Reform Poll: Bipartisan Majority of Americans Support COVID-19 Liability Protections

Posted on by Hamilton

A bipartisan majority of Americans support protecting businesses from lawsuits related to coronavirus, according to a U.S. Chamber Institute for Legal Reform (ILR) poll released earlier this month.

“The global pandemic has caused tremendous economic harm to our nation. As employers plan to reopen safely and sustainably, the last thing they need is to face a financially crippling lawsuit despite their best effort to comply with public health guidelines,” said ILR President Harold Kim.

61 percent of poll respondents generally support coronavirus lawsuit protections. Support for liability protections grew when respondents were asked about specific sectors. Provided businesses are following the latest health guidelines, 84 percent support protecting essential businesses like grocery stores and pharmacies. 82 percent support protecting restaurants, stores and other businesses from lawsuits by people claiming to have contracted coronavirus there. 74 percent support protecting companies who ask sick employees to stay home. 75 percent support lawsuit protections for hand sanitizer and cleaning supply companies. Majorities of Republicans, Democrats, and Independents all expressed their support for these policies.

Wisconsin Civil Justice Council and a coalition of businesses are asking the Wisconsin Legislature to adopt these types of reforms to protect Wisconsin businesses as the state begins to reopen.

Wisconsin Supreme Court Oral Arguments – April 2020

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Several oral arguments that had been postponed in March due to COVID-19 were rescheduled for the April calendar. April oral arguments were conducted remotely and featured several high-profile cases.

 

April 20 – Veto Authority Cases

The Supreme Court heard oral arguments in two cases challenging the veto authority of the governor. 

Bartlett v. Evers challenges vetoes by Gov. Tony Evers in the 2019-21 state budget. The court will review whether the governor can strike “essential, integral, and interdependent parts” of a state budget passed by the Legislature, using examples from Evers’s budget such as the redirection of Volkswagen settlement funds from a school bus replacement program to an electric vehicle charging stations program and the transfer of $74 million in funding to local government transportation projects.

Wisconsin Small Business United, Inc. v. Brennan challenges vetoes by Gov. Scott Walker in the 2017-19 state budget. In that budget, the Governor used his partial veto authority to delay the effective date of a program by 60 years and extend another program by 1,000 years. This case asks whether the governor’s partial veto authority allows him to change dates in a piece of legislation.

 

April 22 – Administrative Rulemaking & Guidance Documents

The court heard oral arguments in Papa v. Department of Health Services. In this case, the court will determine whether a Wisconsin Department of Health Services (DHS) policy in DHS’s Medicaid Provider Handbook has the “force of law” (Wis. Stat. § 227.01(13)) and should be promulgated as an administrative rule and subject to judicial review.

Medicaid-certified nurse Kathleen Papa and Professional Homecare Providers, Inc. (PHP) filed this lawsuit against DHS regarding Topic #66 in DHS’s Medicaid Provider Handbook. Topic #66 states that Medicaid providers must “meet all applicable program requirements” for reimbursement. If providers fail to meet all requirements, DHS can recoup payments from the providers. Papa and PHP argued that Topic #66 was an illegal unpromulgated administrative rule and that the policy exceeded DHS’s explicit statutory authority under Wis. Stat. Ch. 227.

The Supreme Court will review the Court of Appeals finding that Topic #66 was not an administrative rule, and thus Papa and PHP could not obtain a declaratory judgement via Wis. Stat. Ch. 227 judicial review of administrative rule proceedings. Additionally, the Supreme Court will review whether Topic #66 – if not a rule – is a guidance document also subject to judicial review under Ch. 227.

 

April 27 – Gambling Statutes

The court heard Quick Charge Kiosk, LLC v. Josh Kaul, which will determine whether gaming and cell phone charging machines operated by Quick Charge violate certain Wisconsin gambling statutes.

The Quick Charge machines allow customers who insert a dollar in the machine to receive one minute of charging time and 100 credits to play the video chance game. After the charging time expires, customers can no longer play the game but can redeem their remaining credits for cash at the same rate for which they paid for the credits ($1 for 100 credits).

Some municipalities attempted to remove the Quick Charge machines because they believed the machines were illegal gambling devices. In this case, Quick Charge filed an action seeking a declaratory judgment that the machines are in compliance with Wisconsin’s gambling statutes. The state Department of Justice moved for summary judgment, asking the court to declare the machines unlawful.

The Supreme Court will examine whether or not the gambling statutes apply to this specific type of machine and to promotions run by Quick Charge.

Thompson v. State Farm Fire & Casualty Co. (Homeowners Insurance)

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In Thompson v. State Farm Fire & Casualty Co. (2019AP1182), the Court of Appeals District III held that the plaintiff’s injury occurred after the expiration of the insurer’s policy period, so there was no coverage for the plaintiff’s claims.

The Thompsons were visiting a home in Weyerhauser, Wis., in July 2016 when a deck railing collapsed and Richard Thompson fell off the deck. Previous homeowners William and Susan Carroll had built the deck. Seeking compensation for Richard’s injury, the Thompsons sued various persons, including the Carrolls and their homeowners insurer for the Weyerhauser house, Wilson Mutual. The Carrolls’ policies with Wilson mutual expired in August 2013, a few months after they sold the house.

The Wilson Mutual policy provided coverage for liability of the insured “because of bodily injury or property damage caused by an occurrence,” defining “occurrence” as “an accident…that results in ‘bodily injury’ or ‘property damage’ during the policy period.” The policy further states that “This policy only covers losses, ‘bodily injury,’ and ‘property damage’ that occur during the policy period.”

The court found that Wilson Mutual did not cover the Thompsons’ claims because the “occurrence” of “bodily injury” to Richard Thompson occurred in 2016, after the expiration of the Wilson Mutual policy period in 2013.